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Toyota Plants in North America Prepare for Non-Production Time

Source: CNBC

Posted on 24 Mar 2011

People running the Toyota plants in North America are preparing to halt production as the Japanese automaker feels the impact of parts shortages. Toyota notified its team members of the upcoming shutdown Wednesday afternoon, saying, “..our supply line has reached a point where it is clear we will incur some non-production time."

It is not clear what plants may have to idle assembly lines, when it might happen or how long the production halts may last. Also unclear is what models would be impacted.

Toyota is preparing to shut down North American plants comes less than two weeks after an earthquake and tsunami devastated a large part of Japan, north of Tokyo.

While Toyota's final assembly plants in Japan suffered little, if any, damage, scores of auto parts makers in the quake zone have been crippled. Without components from those suppliers, Toyota has been forced to halt production in Japan, and soon will feel the impact at its plants here in North America.

While Toyota prepares for idle assembly lines, it's telling team members it has an adequate supply of new cars, trucks, and SUVs. In its memo outlining possible production halts, Toyota said, "Our ships continue to deliver vehicles to North America, we have reopened our parts plants in Japan and we are doing all we can to ensure our dealers have products available for customers."

Edmunds.com analyst Michelle Krebs said the North American plant shutdown at Toyota is just the start of the ripple effect of the Japan auto parts shortage. "Toyota isn't the only one vulnerable; virtually all major auto makers have some risks,"? said Krebs.